Steinberg v. Icelandic Provisions, Inc.

Background

Rivka Steinberg sued Icelandic Provisions, Inc., individually and on behalf of a proposed class. She alleged that the company’s Skyr product label, website, and other marketing representations falsely suggested that the product was made in Iceland. The product was manufactured in Batavia, New York.

The front of the packaging described the product as “Traditional Icelandic Skyr” and displayed the brand name “Icelandic Provisions” and an image of a snowy countryside. The back stated that the product was “Proudly made in Batavia, NY with domestic and imported ingredients.” It also stated that the product was developed in partnership with an Icelandic dairy. A side panel stated that the product used original Skyr cultures and Icelandic heirloom Skyr cultures.

Steinberg alleged that California consumers would expect the product to be made in Iceland and to have characteristics associated with Skyr made there. She alleged that she purchased the product between August and October 2020 because she believed it was made in Iceland and paid a premium compared with competing products.

Claims and Motion

Steinberg asserted claims under California’s Unfair Competition Law, including its unlawful, unfair, and fraudulent conduct provisions; California’s False Advertising Law; the California Consumer Legal Remedies Act; and a claim for unjust enrichment. She sought monetary and injunctive relief for herself and a proposed class of California purchasers.

Icelandic Provisions moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. It argued that the label was not likely to deceive a reasonable consumer because it did not represent that the product was manufactured in Iceland, and because the back label identified New York as the manufacturing location.

Court’s Analysis

The court explained that the Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act require allegations showing that the challenged conduct was likely to deceive a reasonable consumer. Although that issue is generally a factual question, the court said it may be resolved at the motion-to-dismiss stage when the alleged facts cannot establish deception as a matter of law.

The court held that the front label’s brand name, “Icelandic Provisions,” the phrase “Traditional Icelandic Skyr,” and the snowy countryside image did not represent that the product was made in Iceland. The court distinguished cases involving more specific geographic indicators, such as flags, maps, addresses, invitations to visit a location, or explicit origin statements. It compared the label more closely to packaging that evokes a place or style without claiming that the product was manufactured there.

The court also noted that the product contained Icelandic heirloom Skyr cultures and had been developed in partnership with an Icelandic dairy. Steinberg did not dispute those points, nor did she dispute that the product tasted like Skyr or had Skyr’s consistency. The court characterized her theory as a narrower claim that the product’s other ingredients and manufacturing were not Icelandic.

Because the court found no deceptive representation on the front label, it concluded that the back label’s statement that the product was made in Batavia, New York further refuted the alleged inference that the product was manufactured entirely in Iceland. The court did not reach Icelandic Provisions’s additional arguments concerning pleading particularity, statutory standing, standing for injunctive relief, notice under the Consumer Legal Remedies Act, or available legal remedies.

Disposition

Judge Edward M. Chen granted Icelandic Provisions’s motion to dismiss Steinberg’s California consumer-protection claims under Rule 12(b)(6). The court granted the motion to dismiss Steinberg’s complaint in its entirety with prejudice, meaning the complaint could not be refiled in that action. The court found that further amendment would be futile, denied leave to amend, directed the Clerk to enter judgment, and ordered the case closed.